There is no one in Australia that appreciates the input of the Asian, and in particular the Chinese, dollar more than me. Let's face facts - the entire Platinum Racing outfit would not exist if it were not for our many great Asian shareholders, so my very extensive involvement in the thoroughbreds industry is due to the Asian support and generosity my company has received. Similarly I am aware of the giant strides Asian economies have made in recent years and as a frequent visitor to Asia I am simply in awe at the things that have been achieved.
But a shareholder of my company and a good friend who attended the recent Dubai World Cup Carnival sent me some pretty promising information on the proposed plan to build a "Chinese Meydan" in Tianjin in the north-east of China. While I thought "oh no here is that old chestnut again - horse racing in Mainland China - the promised land and racing mecca for the entire world" - I thought I would check it all out.
Even in Australia we have seen a few "out of the box" racing proposals put into the marketplace - seen people burn their fingers and very little - in fact nothing - come of them. The new proposal for Tianjin sounds lavish - comes with a $4b - yep that's right "B" for billion price tag and rumours are circulating rapidly that Dubai will in fact be asked to lend their expertise in establishing this Meydan replica.
To be named Tianjin Horse City the complex will feature the training of 8,000 "equine professionals", the breeding of a 1,000 quality horses for future breeding purposes and will feature residential sites, luxury hotels, restaurants, stables and its publicists, hired to promote the project, are saying that it will return "significant tax revenues to the State (Chinese Government) within five years."
I may be wrong - and I have been wrong before - but please, spare me! The history of horse racing in China is very chequered and this whole idea sounds like the now dead and buried Beijing Jockey Club proposal of a few years back, the much lauded return to horse racing at Wuhan - which has been a rank failure and various other proposals that have been scuttled by both Triad involvement and Government interference.
There was also the much-vaunted pre-training and spelling centre just across the border from Hong Kong in neighbouring Guandong Province last year, that, with the new bridge across the Perle River Delta to Macau was going to make that area of Guangong a spelling and pre-training hub for Hong Kong and Macau trainers.
Unfortunately I have heard it all before and one has to examine particularly the Chinese Government interference in horse racing proposals to know that if this project gets off the ground - horse steak will again be cheap in Tianjin and all the proposed luxury hotels and restaurants will be serving it before closing down!
Let's go back to the failed Beijing Jockey Club of the 80's. Racecourse was built, bloodstock was imported from all over the world and Teirce, winner of the Golden Slipper here in Australia was among the stallions imported to form the foundation of the "national stud".
Expats from all over the world were employed (as is the case in the rest of Asian racing circles - Singapore, Macau, Malaysia and Hong Kong) and "trial racing" and "exhibition racing" was approved by the central government. Oops - but there was a catch - the Chinese Government actually outlawed betting on the races as a means of controlling Triad involvement and punters could only gamble a small amount of RMB and get a "quick pic" with a number on it like a Lotto slip and the dividends were paid on the lucky numbers.
Of course, Triads started running illegal betting - and the Central Government moved in and the entire operation was closed down. Expats were sent packing, the horses were eaten - including Tierce and it was bye bye Beijing Jockey Club.
All was quiet on the eastern front for a number of years and another foray into horse racing was made in Wuhan - this time the promoters treading vary warily and bringing in "mountain ponies" from Mongolia and other parts of China to start racing not far from Shanghai.
This time the Chinese Government relented and broke the old Communist axiom of "no gambling". A few expats - mainly jockeys were imported to ride at a few of the first meetings and China looked like it might finally join the international league of horse racing countries.
The promoters of the Wuhan project saw it as a goldmine. They could see the turnover in Hong Kong, the vibrant racing industry in Singapore and Wuhan was going to be the best thing since sliced bread on the Chinese business landscape.
Wrong!
Again the Central Government interference ensured that Wuhan would only be a rump of what horse racing could be in China. It began by monitoring punters' bets, demanding the production of ID for larger punters and generally playing Big Brother - something the Government in China simply never fails to do. The end result was many of the larger tax-evading (or worse) businessmen and government officials - who were going to be the financial lifeblood of the Wuhan enterprise began to avoid the project like it was giving you SARS at the front gate.
So the prospects for Tianjin Horse City look pretty bleak - even with only recent history taken into account. Let's get realistic - something that is not a trait when it comes to PRC business proposals. The very proposal being bandied around Dubai only states that "The Group (the promoters) will pay attention to and make proposals on the policy of the State in respect of commercial horse racing."
Wait on - I know some things can be lost in the translation - but this sounds to me like the project does not have the official imprimatur of the mandarins in Beijing.
In fact I will bet it hasn't - and I am a betting man. So what do we have on the drawing board here?
Yes, we have grand plans and I am sure a lot of the Chinese bluff and bluster that this person or that person is "very famous" and has friends in high places that can get the approval. Secondly we have a few gullible people that will throw a hatfull of money in - probably to see it disappear quicker than Tierce did off dinner plates in Beijing.
Thirdly we have a Chinese Government who is very anti-horse racing and gambling who would see a project on such a grand scale as elitist and watering down the communist ethos, something they are trying very hard to maintain wherever possible.
Besides if this wonderous horse city was Government sanctioned you would have had Hu Jintao and Wen Jiabao sitting in the Royal Box at Meydan announcing to the world the plans to stage the Chinese "Universe" Cup meeting - China being China they would not be prepared to have a second Meydan - they would have to be bigger and better.
Unfortunately horse racing in China has a great future if it were allowed to function as it does all around the world - under strict regulations with a legitimate body like the Hong Kong Jockey Club or similar controlling it.
However, outside control is something frowned on in Beijing and therefore the knowledge of the industry simply does not exist in China - contrary to the popularly espoused Chinese line that they have and can do everything.
The very commercial basis of Tianjin Horse City has to be questioned on the chequered history of horse racing in China and the instransigence of authorities to allow an industry to grow and flourish without constant interference and constantly moving the goalposts.
On that basis just who is going to tip in $4b to get this project to the stage where it is dressed up and ready to go without any surety from the PRC Government that it can be allowed to stage race meetings, have a wagering system on its meetings and operate without retardant Government regulations and intereference?
My guess is no one. Chinese businesspeople are far too savvy for that. In fact, many Chinese businessmen - even if they thought it would be a chance of succeeding - would probably shun it simply because of the "baggage" that past racing projects in China carry and many would not like to be seen near something that had not yet received Government approval.
"Face" to successful Chinese businesspeople is paramount. It is in fact a currency that curries favour and opportunity and to be seen to be involved in something that is officially frowned upon would be a risk that many Chinese businessmen would not be prepared to take.
Even though the Chinese love to gamble, very few admit to it as it is culturally eschewed.
I am afraid there is more than the Great Wall Of China standing between the promoters of Tianjin Horse City and a full scale racing product - and anything less than a full scale racing product would be doomed to financial failure and $4b is a significant failure - even by Chinese standards.
If you feel like investing - all I can say is good luck!
By Gary Knight.